Environmental impact

We operate in an industry that has a significant impact on the environment. Environmental management is a critical part of the day-to-day management processes at Keaton Energy. A review of the group’s environmental policy has been completed and an integrated environmental strategy has been developed for review. Our primary focus at this stage is to ensure that we are fully compliant with all applicable legislation and associated regulations, including but not limited to the NEMA, MPRDA and NWA.

We undertake ongoing and extensive consultation with all stakeholders, especially landowners and occupiers of affected land, and any party that may register itself as an interested/affected party as per legislation and associated regulations.

Our group Environmental Manager is responsible for managing and reporting on the group’s environmental performance, impacts and mitigation, as well as ensuring that all our operations and development projects are legally compliant with all applicable environmental legislation and associated regulations. This is driven through the functional reporting structure where the group Environmental Manager reports to the Chief Operating Officer, the role currently being fulfilled by Keaton Energy’s CEO. The SHE Manager at each mine, in turn, reports to the respective Mine Managers who report to the CEO.

We manage our daily environmental footprint with the implementation of the mandatory EMPs at the collieries. Vanggatfontein, Moabsvelden and Vaalkrantz have approved EMPs in place. These EMPs focus on:

responsible mining

monitored water usage

reducing emissions

reducing spillages

recycling; and

rehabilitation

We have indicated our eagerness to address and rectify any possible historical incidents of non-compliance and have demonstrated our proactive approach to responsible environmental management by ensuring that our assets are operated in accordance with the principles of duty of care and are environmentally compliant.

*This excludes the cost assiciated with ongoing back filling of voids.

At year-end, the total mine closure and environmental rehabilitation provision for the group amounted to R298.1 million (FY15: R270.1 million).

Water

Vanggatfontein Colliery had its IWUL issued by the DWS in January 2015. The colliery endeavours to be self-sufficient in terms of water supply and usage. Water from the opencast pits is pumped to the plant PCD which supplies the coal handling and processing plants, before being recycled via slurry dams back to the PCD for reuse in the plant. Clean water for the operation of the flocculent plant is sourced from on-site boreholes. The water management system is designed to separate clean and dirty water, and to optimise the recycling and reuse of dirty water.

The IWBSM developed in 2012 assists in defining and driving water management strategies and aids in the decision-making process by simulating and evaluating various water management strategies before implementation. The IWBSM is updated annually, and in compliance with our IWUL, in order to achieve effective and efficient utilisation of our water resources based on reducing our water demand, reusing our process water and preventing any discharges to the environment. We developed a static water balance and a baseline dynamic model with most of the associated flow information available. This played a role in our decision to construct the filter press plant at Vanggatfontein, with the benefit of a meaningful improvement in raw water utilisation.

The prolonged lower-than-normal rainfall received in the year under review and the resultant drought conditions experienced regionally, has impacted the availability of water in surface impoundments at our Vanggatfontein operations. This has forced us to be more reliant on groundwater and thus increased our water consumption during the year.

At Vaalkrantz, water is sourced from three earthwall dams constructed within the mine’s footprint, which are fed by surface water run-off, as well as three separate springs above the Enyati and West Block adits. In addition, the adjacent PCD collects supernatant water from the Number 2 Mine Residue Dump and returns this water to the coal handling and processing plant, the primary source of recycled water at the mine. Groundwater that seeps into the underground workings during mining is stored in low-lying underground areas and pumped either to underground mining equipment that rely on a constant water supply for operation and maintenance or to the surface as part of safe mining practices.

Due to the current drought conditions occurring regionally in KZN, operations at Vaalkrantz were placed on care and maintenance post-year-end. Once operations resume when climate and financial conditions improve, the colliery will actively investigate various options to maximise the reuse and recycling of all available water on site.

Rainwater is accounted for in the total water reused on the sites. Neither mine uses water purchased or supplied by the municipalities.

Water withdrawal by source (m³)

Vanggatfontein

Vaalkrantz

Water source

FY16

FY15

FY16

FY15

Groundwater

606 048

506 283

87 409

98 100

Surface water

–

n/a*

129 553

146 498

Total water used for primary activity

606 048

506 283

216 962

244 598

*Surface water is not abstracted for use at Vanggatfontein – only groundwater from boreholes is used as a source of water.

At both Vanggatfontein and Vaalkrantz, water consumption is monitored by strategically placed water meters where both losses and inefficient water uses can be identified and remedied.

Materials

Measuring explosives used is important, as explosives contribute to Keaton Energy’s GHG emissions. The following materials were consumed at our collieries during the year:

Vanggatfontein

Vaalkrantz

Consumed materials

FY16

FY15

FY16

FY15

ANFO explosives (tonnes)

6 257

6 437

112

172

Energy

Monitoring energy consumption determines Keaton Energy’s scope 1 and 2 GHG emissions. We have been measuring and reporting our energy consumption and related emissions since 2012. The following sources of energy were consumed at our collieries during the year:

Vanggatfontein

Vaalkrantz

Energy source

FY16

FY15

FY16

FY15

Diesel energy consumed (GJ)

420 229

470 995

43 535

68 976

Petrol energy consumed (GJ)

-

-

21

34

Electrical energy consumed (GJ)

39 132

42 338

26 039

33 184

The following factors were applied to convert the consumption of energy sources to energy statistics: diesel 39.6GJ/tonne; petrol 32.4GJ/tonne; and electricity 0.0036GJ/kWh.

Energy intensity
Using the energy figures below and the total sales volumes for each mine, it is possible to determine the energy intensity of each colliery – an indication of the cost of energy required to produce each tonne of saleable product – as well as efficiency trends.

Vanggatfontein

Vaalkrantz

FY16

FY15

FY16

FY15

Total energy (GJ)

459 361

513 333

69 596

102 194

Energy intensity (GJ/ saleable tonne)

0.194

0.209

0.230

0.258

Emissions

Our risk management processes require that we take cognisance of both the risks and opportunities that relate to current views on climate change and consider these as part of the company’s ongoing strategy development. Growing concern regarding the potential impacts of anthropogenic climate change and the South African government’s plans to introduce a carbon tax mean that managing our emissions is and will increasingly become more material to the way we run our business.

In order to control Keaton Energy’s GHG emissions, we carefully budget fuel consumption for our mining and logistics operations to ensure that they are operated and maintained to maximise fuel efficiency.

Using the World Business Council for Sustainable Development/ World Resources Institute (WBCSD/WRI) Greenhouse Gas Protocol, we provide data on scopes 1 and 2 for our two collieries. Emissions related to head office activities in Johannesburg are not reported due to their insignificance. Scope 1 and 2 emissions have been determined by applying published emissions factors to direct energy measurements taken at the respective sites.

Vanggatfontein

Vaalkrantz

Energy source

FY16

FY15

FY16

FY15

Scope 1 (tCO2e)

29 372

32 822

2 953

4 649

Scope 2 (tCO2e)

10 761

11 643

7 161

9 126

Total (tCO2e)

40 133

44 465

10 114

13 775

Note: The above emissions exclude any estimate of the global warming potential arising from the release of methane from coal mining operations.

The following factors were applied to convert the consumption of energy sources to GHG emissions statistics: diesel 0.00267ℓ/ tCO2e; petrol 0.00231ℓ/tCO2e; and electricity 0.99kWh/tCO2e.

Using the GHG emissions figures disclosed previously, together with the total sales volumes for each mine, it is possible to determine the emission intensity of each mine.

Our coal is trucked to rail sidings, end-users or ports by outsourced independent contractors. Based on operational data collected, it is estimated that the hauliers’ vehicles used to deliver our product travelled about 11.6 million kilometres per annum. Using the 2015 DEFRA emissions factor for vehicles weighing more than 33 tonnes and operating at 50% average load, this activity produces approximately 6 314 tCO2e (FY15: 10 983 tCO2e), which is a significant decrease due to Eskom product being delivered to closer sidings and power stations in the period under review. We consider many other contributors to our other indirect GHG emissions (scope 3) to be immaterial and as such do not measure or report on this indicator.

GHG emissions intensityUsing the GHG emissions figures disclosed previously, together with the total sales volumes for each colliery, it is possible to determine the emission intensity of each mine.

Vanggatfontein

Vaalkrantz

FY16

FY15

FY16

FY15

Emission intensity (tCO2/saleable tonne)

0.0170

0.0181

0.0335

0.0348

Biodiversity

The total area of land disturbed by the company’s mining operations is 425 hectares – 353 hectares at Vanggatfontein and 72 hectares at Vaalkrantz. Neither mine is within nor adjacent to protected areas or areas of high biodiversity. Biodiversity management plans are therefore not considered necessary.

At Vanggatfontein five bio-monitoring sites on the Wilge River and its tributaries are monitored during the wet and dry seasons. Blast vibration and noise monitoring are also conducted on a regular basis.

Particulate matter

Fugitive dust at the Vanggatfontein Colliery is monitored at various locations to ensure compliance with applicable legislation. A dust suppression spray system and a misting system reduce fugitive dust levels from the respective coal handling and processing plants. Dust generated on unpaved roads is suppressed using water bowsers to wet the roads. We are investigating alternate road building materials which can be treated with dust suppressant to further reduce the mine’s dust generation. The application of a chemical dust suppressant on certain parts of our access road has been trialled and we have been closely monitoring the effectiveness thereof. We will continue investigating the application of this chemical suppressant on other sections of our access road in the next financial year.

Vanggatfontein has a weather station to assist in determining the sources of fugitive dust by correlating trend analysis with weather conditions. It also provides an early warning of large storms and high winds. There are 14 dust fallout buckets within two kilometres of the mine, from which samples are taken on a monthly basis. Most of the monitoring stations within the Mining Right area are in compliance with the South African National Standards industrial limit of 600mg/m2 to 1 200mg/m2 per day, except for monitoring stations in the vicinity of the plant and the mine entrance. Coal transport trucks are covered with tarpaulins after they are loaded with coal, and dust buckets are strategically placed on the access road to measure the dust emissions. The impact of dust, vibration and noise at Vaalkrantz Colliery is limited as it is an underground mine.

Effluents and waste

Effluents
We regularly monitor the quality of both ground and surface water, although our collieries do not discharge any dirty water into the environment. At Vanggatfontein, we record the water levels of 25 boreholes on a monthly basis and test quality quarterly. Sixteen surface water sites are also sampled quarterly for quality. At Vaalkrantz, the surface and groundwater monitoring points are sampled on a monthly basis. In 2014, we submitted a water management strategy to DWS in support of our IWUL application for Vaalkrantz. We are awaiting DWS approval for implementation of the strategy in a phased approach over the next three years. We are optimistic that the proposed strategy will assist in the approval of our IWUL.

Waste
Our collieries generate consumable waste, processing waste and development waste. Recycling of consumable waste has been limited to scrap metal and used oils, but we are considering introducing recycling programmes to further reduce consumable waste and lower operating costs. Processing waste is produced during the beneficiation of coal. Processing plant fine coal discard, or slurry, has for many years been stored in purpose-built Tailings Storage Facilities (TSFs) or co-disposal facilities. At Vanggatfontein, the group has embarked on the sale of slurry and discard as by-products in their respective processes. Slurry is used in the brickmaking industry and discard is used for briquettes in the domestic heating and industrial boiler industries.

A filter press plant has been constructed at Vanggatfontein and was designed with the specific intention of increasing revenue from the colliery, reducing our environmental footprint and improving raw water utilisation. Fine coal and dense medium separation discard is stockpiled on co-disposal facilities. The filter press plant will eliminate the slurry stream and the mine will no longer discard a carbonaceous wet stream from coal processing operations. This materially reduces the short-term risk of water decant liabilities. In the long term, we will substantially reduce the volume of fine discard and therefore the impact on surface and groundwater sources. In addition, we will be able to remine our historically deposited discards, further reducing our discard footprint and environmental liabilities.

Vaalkrantz has a significant quantity of mining discard which has built up over the years that must be vegetated and rehabilitated when the mine is closed. No overburden dumps are present at Vaalkrantz as the Coal Reserve is mined directly via adits. Limited overburden removed during adit establishment is utilised to establish adit platforms. Geochemical assessments were conducted at the discard dumps and adits. Results showed that there is potential for acid generation at the dump but that the dump is lined with dolerite which is believed to have zero to very low permeability.

During the year, no significant spills occurred which required reporting to the authorities.

Environmental complaints

Vanggatfontein maintains a formal environmental complaints register and incidents are reported through a formal incident reporting and investigation system. A complaint is defined as a critical observation or query about our environmental policy, management system or performance from interested and affected parties requesting a response or remedial action, or otherwise worthy of a response. Vaalkrantz received no complaints during the year. Vanggatfontein received two complaints for blasting and one for dust. All complaints were investigated and resolved.

Klip Colliery case study

In September 2008, we received a mining permit to commence opencast mining on a small area on the farm Klipfontein, near the town of Ogies in Mpumalanga. Mining commenced at Klip Colliery and all available coal was mined using opencast methods. Rehabilitation work at Klip Colliery started in 2010 with backfilling of the opencast void and returning previously stockpiled topsoil to the new ground level. This included the implementation of an erosion control plan and the construction of erosion management berms to prevent further erosion and degradation.

The drought of the 2015/16 growing season has necessitated us to not do any further earthmoving or vegetation establishment at this site. Bare patches and subsided areas that were addressed in the latter part of the 2014/2015 growing season only started to show some recovery in late March 2016. The previously completed brushpacking proved to be very effective. Only the control of Category 1 declared weeds was done during the 2015/16 growing season. Some areas of subsidence have been noted in the year under review and this will be addressed in the 2016/17 growing season.

Through the various stakeholder engagement structures, the Vanggatfontein Colliery maintains a formal environmental complaints register. Incidents are reported through a formal incident reporting and investigation system implemented at the mine. A complaint is defined as a critical observation or query about our environmental aspects, policy, management system or performance from interested and affected parties requesting a response or remedial action, or otherwise worthy of response.

The following graphic reflects the number and nature of the complaints received, investigated and resolved at Vanggatfontein during the year: G4-EN34

Environmental complaints

A similar system will be introduced at Vaalkrantz in the coming financial year.